PPF.501.lotus.blossom

PPF.501.lotus.blossom - LOTUS BLOSSOM HOTEL The Lotus...

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LOTUS BLOSSOM HOTEL The Lotus Blossom Hotel has a total of 300 rooms. Like many hotels, and most major airlines, the Lotus Blossom Hotel has adopted a policy of overbooking in an effort to maximize usage of its available lodging capacity. Past data indicate that 15% of the people holding reservations cancel the reservation, or simply do not show up at the hotel on a given night, while 85% of the people with reservations show up to keep their reservation. Lotus Blossom management believes that it is a good approximation to the real world to assume that each reservation is kept or cancelled, independent of the situation with any other reservation. Lotus Blossom management is concerned with profitability, and filling otherwise vacant rooms, but it also concerned with having to tell people with a reservation that there is no room available for them. The latter situation greatly reduces the goodwill that Lotus Blossom enjoys, even though Lotus Blossom gets the person a room at another close-by and good quality hotel. Thus,
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PPF.501.lotus.blossom - LOTUS BLOSSOM HOTEL The Lotus...

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